Introduction
Real estate insolvency under the Insolvency and Bankruptcy Code (IBC), 2016 has long been marred by procedural deadlocks, funding challenges, and emotional stakeholder dynamics—especially concerning homebuyers. Recognizing these hurdles, the Insolvency and Bankruptcy Board of India (IBBI) introduced significant regulatory amendments effective from 3rd February 2025. These amendments directly empower the Resolution Professional (RP) to take constructive steps towards completing projects, handing over possession, and protecting stakeholder interests—without waiting for full resolution.
As an RP actively handling CIRPs of real estate entities, I have outlined below the key changes that provide practical authority and operational clarity.
Key Amendments Empowering the RP in Real Estate CIRP
1.Regulation 4E – Handover of Possession and Registration During CIRP
What it Empowers:
RPs can now:
- Hand over possession of flats/plots/units to allottees who have made full payment, and
- Facilitate registration in their favor, even before the resolution plan is finalized.
Conditions:
- Allottee must apply formally for possession.
- The unit must be substantially complete and safe for occupation.
- CoC approval (minimum 66% voting) is mandatory.
Practical Impact:
This resolves a long-standing issue where fully paid allottees were stuck despite completion of construction. Earlier, RPs hesitated due to ambiguity under Section 14 (moratorium). Now, possession and registration are explicitly permitted as part of ordinary business operations.
2. Regulation 18(4) and 18(5) – Participation of Competent Authorities in CoC Meetings
What it Empowers:
Competent authorities such as:
- RERA,
- Municipal Corporations,
- Development Authorities (e.g., NOIDA, HUDA),
may now be invited to attend CoC meetings (without voting rights) to provide real-time input.
Practical Impact:
This significantly improves coordination for:
- Occupancy Certificates (OC),
- Building Plan Approvals,
- Completion Certifications, and
- Registration formalities.
It reduces bureaucratic delays that earlier extended the CIRP beyond its timeline.
3. Regulation 30C – RP’s Report on Project Approvals and Development Rights
What it Empowers:
Within 60 days of commencement of CIRP, the RP must submit a report outlining:
- Development rights held by the CD,
- Regulatory approvals received / pending,
- Encumbrances on land or structure.
Practical Impact:
This creates an early-stage snapshot of the project’s legal and construction status, enabling:
- Transparent CoC discussions,
- Quicker decision-making on handover and funding,
- Smooth onboarding for prospective resolution applicants.
4. Regulation 16C/16D – Appointment of Homebuyer Facilitators
What it Empowers:
The RP or Authorized Representative (AR) may appoint facilitators (max 5) to:
- Assist in communicating with sub-classes of creditors such as homebuyers,
- Collate claims, answer queries, and share updates.
Practical Impact:
This bridges the communication gap between the RP’s office and thousands of homebuyers. It improves alignment, reduces grievance calls, and enhances cooperation during voting.
5. Relaxed Eligibility for Homebuyer-led Resolution Plans
What it Empowers:
Where homebuyer groups (holding ≥10% voting share) propose a resolution plan:
- The CoC can relax eligibility conditions, including:
- EMD (Earnest Money Deposit),
- Bid security,
- Technical criteria, etc.
Practical Impact:
This allows serious homebuyer associations or societies to take over stalled projects legally under a plan. It unlocks community-led revival possibilities without unnecessary financial barriers.
Judicial Backing: Possession During CIRP Is Lawful
- Recent rulings by NCLAT and Supreme Court have clarified that possession and registration to allottees (who have paid in full) do not violate the moratorium under Section 14.
- This formed the basis for the IBBI to codify the same via Regulation 4E.
Summary of Amendments in IBC regulations:
| Amendment | Authority to RP | Resulting Benefit |
| Reg 4E | Possession + Registration to fully paid allottees | Resolves stuck cases with complete units |
| Reg 18(4)(5) | Involve RERA/Municipal in CoC | Fast OC/CC/plan clearances |
| Reg 30C | Report on approvals & development status | Improves CoC planning |
| Reg 16C/16D | Appoint facilitators for homebuyers | Better communication & reduced friction |
| Reg 36A/B (read with IBBI circulars) | Relax eligibility for homebuyer resolution plan | Enables buyer-led revival of projects |
Expert Recommendation for RPs
As RPs, we should:
- Identify eligible allottees early (those who paid in full).
- Use CoC support proactively for 4E motions.
- Engage competent authorities from the start.
- Build a dataroom with project legal/technical status per Reg 30C.
- Appoint facilitators to handle buyer queries.
- Encourage homebuyer consortia to consider resolution proposals.
Conclusion
These amendments are landmark reforms that reflect the regulator’s recognition of the ground realities in real estate insolvency. As Resolution Professionals, we are now better positioned—both legally and operationally—to deliver tangible progress to homebuyers and financial creditors alike.
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I am Insolvency Resolution Professional handling many real estate projects. In case of any queries related to IBC, you may contact me at Krit Narayan Mishra, kritmassociates@gmail.com | 9910859116
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